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ECON 1000 (397)
Chapter 23

Chapter 23 Finance Saving Investment.pdf

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Department
Economics
Course
ECON 1000
Professor
Steven Edwards
Semester
Winter

Description
estmentCH 23Finance Saving Inv1Capital isAthe tools instrumentse machines buildings eand other items that ehave been produced in ethe past and that areeused today to produece goods and serviceseBfinancial wealthCnet investmentDgross investmentEthe sum of investment eand government expendieture on goodsTopicFinancial Institutions and Financial Markets2Gross investmentAis the change in the vaelue of capitalBincludes only replaceement investmentCis the total amount espent on new capitaleDequals saving minus weealthEequals wealth minus saevingTopicFinancial Institutions and Financial Markets3The total amount spenet on new capital isAdepreciationBnet investmentCsavingDgross investmentEwealthTopicFinancial Institutions and Financial Markets4In January 2008 Tims Geyms Inc owned machienes valued at 1 millieon During the year tehe market value of theemachines fell by 30 perecent During 2008 Tim speent 200000 on new machinese During 2008 Tims grosse investmentwasA1 millionB300000C100000D900000E200000TopicFinancial Institutions and Financial Markets5Net investment equalsAgross investment minus edepreciationBthe total quantity oef plant equipment aend buildingsCcapital minus depreceiationDwealth minus savingEgross investmentdeprecieationTopicFinancial Institutions and Financial Markets16The increase in the value of capital isAnet investmentBwealthCdepreciationDprivate sector spendingEgross investmentTopicFinancial Institutions and Financial Markets7Capital stock increases whenAgross investment exceeds net investmentBnet investment exceeds gross investmentCgross investment is negativeDnet investment is zeroEnet investment is positiveTopicFinancial Institutions and Financial Markets8If the economys capital increases over timeAgross investment equals depreciationBdepreciation is less than zeroCnet investment is positiveDdepreciation exceeds gross investmentEgross investment is zeroTopicFinancial Institutions and Financial Markets9If the economys capital decreases over timeAdepreciation is less than zeroBgross investment is zeroCgross investment equals net investmentDnet investment is positiveEdepreciation exceeds gross investmentTopicFinancial Institutions and Financial Markets10In January 2008 Tims Gyms Inc owned machines valued at 1 million During the year the market value of themachines fell by 10 percent During 2008 Tim spent 200000 on new machines During 2008 Tims net investmentwasA1 millionB200000C300000D11 millionE100000TopicFinancial Institutions and Financial Markets11The Acme Stereo Company had a capital stock of 24 million at the beginning of the year At the end of the year thefirm had a capital stock of 20 million Thus itsAnet investment was 4 million for the yearBnet investment was some amount but we need more information to determine the amountCgross investment was zeroDdepreciation was 4 millionEnet investment was 4 million for the yearTopicFinancial Institutions and Financial Markets2
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